1. 2008 Schedule OS Instructions
If the tax-option (S) corporation, LLC, or partnership filed a
GENERAL INSTRUCTIONS composite income tax return with another state and paid tax on
your behalf to that state, complete lines 1-28 and 30-35. Use a
separate column for each state to which tax was paid. Do not
PURPOSE OF SCHEDULE OS
complete line 29 to report the tax paid to the other state on your
Schedule OS is used by individuals, estates, and trusts to behalf. You may have to contact the entity to determine the state
compute the allowable credit for net income tax paid to another to which the tax was paid, your distributive share of the entity’s
state. income on which tax was paid on your behalf, and the type of
income on which the tax was paid (for example, ordinary income
WHO IS ELIGIBLE FOR THE CREDIT from trade or business activities, long-term capital gain, interest
income, etc.). You will need this information when completing
You may be eligible for the credit for net income tax paid to Schedule OS.
another state if:
If the tax-option (S) corporation, LLC, or partnership filed its own
• You were a Wisconsin resident for all or part of 2008, and income tax return with another state and paid tax on its income
to that state, complete lines 23, 29, and 30-35. Use a separate
• You paid 2008 income tax to Wisconsin and to another state
column for each state to which tax was paid. Do not complete
or the District of Columbia on the same income. “State” does
lines 1-22 and 24-28 to report the tax paid by the entity on its
not include the Commonwealth of Puerto Rico or the several
income. You may have to contact the entity to determine the state
territories organized by Congress.
to which the tax was paid, your pro rata share of the amount of
You may not claim credit for any tax paid to a local unit of income taxable to the other state, and the type of income on
government (such as a city, county, or school district) or for any which the tax was paid (for example, ordinary income from trade
tax that is not an income tax (such as a severance tax, personal or business activities, long-term capital gain, interest income,
property tax, real estate tax, or sales and use tax). etc.). You will need this information when completing lines 23
and 29.
Wisconsin residents working in Illinois, Indiana, Kentucky,
Michigan, and Minnesota If you had 2008 state income tax IF YOU PAID TAX TO MORE THAN FOUR OTHER
withheld for Illinois, Indiana, Kentucky, Michigan, or Minnesota STATES
from personal service income you received from working in
one of those states, do not use Schedule OS. You can get a If you paid 2008 net state income tax on the same income to
refund of the tax withheld for the period you were a Wisconsin Wisconsin and to more than four other states:
resident by filing that other state’s income tax return with that
1. Complete additional Schedules OS, as needed, through
state. Personal service income includes wages, salaries, tips,
line 31,
commissions, bonuses, etc. For more information, get Wiscon-
2. Add the amounts from line 31 from any additional Sched-
sin Publication 121, Reciprocity. This publication is available
ules OS, and
from any department office or from our Internet website at
www.revenue.wi.gov.
3. Fill in the total on line 32 of your first Schedule OS.
If you paid 2008 net income tax to one of those states on income
other than from personal services (such as income from operating
LINE INSTRUCTIONS
a business, rental property, or from the sale of real property), you
may be eligible for the credit based on this income. Complete
Note You must first complete your income tax return for the
Schedule OS.
other state. The credit is computed using amounts from that
other state’s return.
Part-year residents To be eligible, you must have been a
Wisconsin resident when you received the income that was
Lines 1 – 21 Complete a separate column for each state to
taxed by both states.
which tax was paid for 2008. Fill in the amount of each income
and adjustment item that was taxed by the other state. These
Nonresidents You generally must be a full-year or part-year
amounts are generally shown on a nonresident or part-year
Wisconsin resident to claim the credit. There is a limited circum-
resident return or a schedule showing the other state source
stance in which a nonresident may claim the credit. If you are a
income attached to the other state return.
shareholder of a tax-option (S) corporation, member of a limited
liability company treated as a partnership (LLC), or partner of a These line descriptions correspond to lines used for reporting
partnership that files its return on a fiscal-year basis, you may income and adjustments for federal tax purposes. Do not fill in
claim a credit for tax paid by such entity for a period during which your federal income on these lines, even in those cases where
you were a Wisconsin resident. the other state computes tax based on federal income and
then prorates the tax based on the amount of that state source
Credit computed by a tax-option (S) corporation, limited income to federal income. Fill in only the other state source
liability company treated as a partnership (LLC), or partner- income and adjustments.
ship You may claim the credit based on your share of income
If a tax-option (S) corporation, LLC, or partnership filed a
taxes paid to another state by a tax-option (S) corporation,
composite income tax return with another state and paid tax
LLC, or partnership if the income from the entity is included in
to that state on your behalf, fill in the income on which tax was
Wisconsin income.
paid by the entity. For example, if the entity paid tax on your
I-123 (N. 11-08) Wisconsin Department of Revenue

2. behalf on $10,000 of business income and $5,000 of long-term income tax paid on your behalf on a composite income tax return
capital gain, fill in $10,000 on line 4 and $5,000 on line 5. filed by the tax-option (S) corporation, LLC, or partnership. This
amount should have been included above.) If you are completing
Line 22 For each state, fill in the total income taxed by that state. line 29, also fill in on line 23 the postal abbreviation for the state
This will generally be the total of the amounts on lines 1-12 less to which the entity paid the tax.
the total of the amounts on lines 13-21.
The amount of tax to fill in on this line must be prorated if the
Line 24 Fill in the amount of income taxable by both Wisconsin income taxed by the other state includes income that is not
and the other state on line 24. included in Wisconsin income. For example, only a portion of
capital gain on the sale of assets held more than one year is
CAUTION Wisconsin taxes only 40% of the net gain on the sale
included in Wisconsin income and thus a proration is required.
of assets held more than one year. Most states tax 100% of such
See the CAUTION and examples in the line 24 instructions for
gain. Therefore, the income taxed by both states is generally
information on the taxation of capital gain on assets held more
less than the amount shown on the other state’s return. When
than one year.
the credit is claimed for tax paid to another state for gain on the
sale of property that was held more than one year, the amount of
If the amount of tax paid to the other state by the tax-option (S)
income taxable by Wisconsin is generally less than the amount
corporation, LLC, or partnership includes tax on long-term capital
taxed by the other state.
gain (or on any other income not included in Wisconsin income),
use the following formula to determine the amount of credit you
Example 1: You filed an Illinois income tax return and reported
may claim:
a $10,000 gain on the sale of property held more than one year.
For Wisconsin tax purposes, you claim the 60% capital gain
Income taxable by Net Amount
exclusion. The amount of income taxable by both Wisconsin
both Wisconsin income tax allowable as
and the other state is $4,000 ($10,000 less the $6,000 capital
x =
and other state paid a credit
gain exclusion).
Total income taxable to other against
Example 2: You filed a California income tax return and reported by other state state Wisconsin tax
a $20,000 gain on the sale of property held more than one year.
For further information on tax paid by a tax-option (S) corpora-
For Wisconsin tax purposes, a portion of the gain was offset by
tion, LLC, or partnership, see Part VII of Publication 125, Credit
a $4,000 capital loss. You claim the 60% capital gain exclusion
for Tax Paid to Another State.
on the remaining $16,000. The amount of income taxable by
both Wisconsin and the other state is $10,400 ($4,000 which is Line 35 Fill in the amount of your credit from line 35 on line 33
included in Wisconsin income but offset by the capital loss plus of Form 1, line 59 of Form 1NPR, or line 14 of Form 2. Also fill
$6,400 which is taxable after the capital gain exclusion is applied). in the 2-letter postal abbreviation for the state to which you paid
Note In this example, if you had more than one long-term capital the tax in the space to the left of the entry line on Form 1, 1NPR,
gain, a portion of the loss would be allocated to each gain. See or 2 (see Exceptions below). For example, if you paid tax to
Wisconsin Publication 125, Credit for Tax Paid to Another State, California, you would fill in CA in the space.
for more information.
Exceptions
Line 25 For each state, fill in the total income taxed by the other
state before subtracting any standard or itemized deductions • If you paid tax to more than one other state, fill in the number 99
or personal exemptions. This will generally be the amount on in the space instead of a 2-letter postal abbreviation.
line 22. • If you have an amount on line 5 of Schedule OS (capital gain/
loss), fill in the number 88 in the space instead of the 2-letter
Line 26 For each column, from the income tax return of the other
postal abbreviation.
state, fill in the net tax amount after subtracting all nonrefundable
• If you have an amount on line 29 of Schedule OS (tax paid by a
and refundable credits. Do not include tax withheld or estimated
tax-option (S) corporation, LLC, or partnership on its income),
tax payments as a credit.
fill in the number 77 in the space instead of the 2-letter postal
Example: Your income tax return from the other state shows the abbreviation.
following:
• If you meet the conditions above to fill in both 77 and 88, fill in
Gross tax . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000. the number 99 in the space.
Less nonrefundable credit . . . . . . . . . . . . . 100.
Note: Failure to fill-in the correct numerical code may result in an
900.
incorrect computer adjustment to the amount of your credit.
Tax withheld. . . . . . . . . . . . . . . . . . . . . . . . . 600.
Estimated tax payment . . . . . . . . . . . . . . . . 400.
Enclosures Enclose Schedule(s) OS with Form 1, 1NPR, or 2.
Refundable credit . . . . . . . . . . . . . . . . . . . . 100.
You must also enclose a copy of your income tax return(s) from
Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200.
the other state(s) and your W-2 form(s) (wage statement) or other
The amount to fill in on line 26 is $800. This consists of $1,000 withholding statement(s) from the other state(s).
gross tax less $100 nonrefundable credit and less $100 refund-
If you are claiming credit for tax paid to other states by a part-
able credit.
nership, LLC, or tax-option (S) corporation, enclose a copy of
the Wisconsin Schedule 3K-1 or the 5K-1 you received. If the
Line 29 Fill in on line 29 your share of the income and franchise
partnership, LLC, or corporation did not file a Wisconsin return,
taxes that were measured by income and paid to another state
submit federal Schedule K-1 plus a statement from the partner-
by a tax-option (S) corporation, LLC, or partnership of which you
ship, LLC, or (S) corporation listing the states where tax was
were a shareholder, member, or partner. A credit is available for
paid, the type of income that was taxed, and the amount of each
the tax paid only if the income taxed by the other state is also
state’s tax allocable to you.
included in Wisconsin income. (Note This is not the individual
-2-